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Pursuant to a congressional request, GAO reviewed state disability determination services (DDS) to: (1) evaluate the effects of budget constraints that the Social Security Administration (SSA) imposed on state agencies' operations; and (2) determine whether SSA productivity standards were appropriate.

GAO found that budget reductions: (1) limited the number of continuing disability reviews that SSA required the states to do in fiscal year (FY) 1987; (2) cost the Disability Insurance Trust Fund more than $200 million in unnecessary benefit payments; (3) reduced state agencies' work-years for FY 1987 by 3.7 percent; (4) created a backlog of over 300,000 medical-improvement-expected (MIE) cases, which will require the use of contingency reserve funds to complete; and (5) could affect the quality of disability determinations. GAO also found that: (1) SSA plans to increase the overall DDS operating budget by $13 million, but will reduce DDS staff by 3.5 percent; (2) the SSA productivity measurement system did not provide accurate or uniform productivity comparisons among DDS; and (3) although SSA developed a Cost-Effectiveness Measurement System which would correct most of the weaknesses in its current system, it did not consider the type of impairment in each DDS case mix.

Recommendations for Executive Action

Status: Closed - Implemented

Comments: SSA has completed its review of backlog cases.

Recommendation: The Secretary of Health and Human Services should direct SSA to eliminate the backlog of MIE cases. SSA should determine whether it has sufficient funds in its FY 1988 budget (including the contingency fund) to process these cases. If sufficient funds are not available, the Secretary should seek legislative authority to expend additional trust funds to process MIE cases.

Agency Affected: Department of Health and Human Services

Status: Closed - Not Implemented

Comments: After considering the use of a MEDDIC subsystem to recognize case-mix by impairment type, the Department of Health and Human Services rejected the idea as impractical.

Recommendation: The Secretary of Health and Human Services should direct SSA to recognize in its Cost-Effectiveness Measurement System the particular case mix by type of impairment for each DDS when developing productivity measurements and comparisons.